Final Results 2018

RNS Number : 9445R
Glenveagh Properties PLC
06 March 2019
 

Glenveagh Properties PLC

 

Final Results 2018

 

Glenveagh Properties PLC ("Glenveagh" or the "Group") a leading Irish homebuilder listed on Euronext Dublin and the London Stock Exchange announces its Final Results for the year ended 31 December 2018.

Financial Highlights

·     Revenues of c. €84m inclusive of 275 units sales totalling €79m and land sales of €5m;

·     Gross margin of €15.3m (18.2%);

·     Administration expenses for the year of €17.2m net of depreciation and amortisation (€0.2m) and exceptional costs (€0.4m);

·     Net loss after tax of €3.5m pre-exceptionals;

·     Inventory of €719m inclusive of €101m investment in work-in-progress; and

·     Net cash of €131m at 31 December.

Operational Highlights

·     Total site acquisition investment of c. €615m since IPO, including c.€50m (800 units) announced today;

·     The landbank, now in excess of 12,600 units, has been assembled at attractive rates in the context of both cost per site €51k[1] and site cost as a percentage of NDV 17%[2];

·     Actively constructing on 14 sites during 2018 with over 1,100 units under construction during the period, substantially de-risking delivery targets;

·     Construction costs in line with expectations with over 90% of costs associated with 2019 deliveries now agreed. CPI less than 3% on current tendering;

·     The Group are currently selling from eleven sites with 451 units sold, signed or reserved (excluding Herbert Hill, Dundrum) at 5 March (202 at 31 December);

·     Active in the Strategic Housing Development ("SHD") planning process with in excess of 5,500 units at various stages of the planning process during 2018 and 2019; and

·     Significant progress made towards obtaining planning and de-risking the Group's large scale 1,850+ unit PRS portfolio in addition to developing its long term Mixed-Tenure capabilities.

Project Arrow and Sites in Exclusivity

The Group has exchanged contracts to acquire two sites off-market for a consideration of approximately €50m ("Project Arrow").

Located at Leixlip and Newbridge Co. Kildare, the properties currently have full planning permission for 793 units:

·     Site 1: 47 acres at Barnhall, Leixlip, Co Kildare with planning permission for 450 units; and

·     Site 2: 47 acres at Kilbelin, Newbridge, Co Kildare with planning permission for 343 units.

Project Arrow further strengthens Glenveagh's focus on delivering starter homes in the Greater Dublin Area ("GDA"). Benefitting from strong planning permissions, construction is expected to commence in H2 2019 with the first units closing in 2020.

Further site acquisitions totalling €26m (730 units) across three GDA sites are in exclusivity. The blended cost per unit of Project Arrow and transactions in exclusivity is €51k (net of fees and stamp duty).

Glenveagh's Co-Founder and CEO Justin Bickle commented:

 

"2018 was a very strong execution year at Glenveagh. We were delighted to exceed our key targets, selling 275 homes in our first full year's trading, against our 250 goal, and continued to add new sites to our attractive and flexible land portfolio. The firm foundations we laid during the year gave us significant momentum heading into 2019 and position us favourably for long term success. 2018's achievements were the product of considerable hard work by many people across our organisation and support from our industry partners.

 

We remain very confident about the residential market backdrop in Ireland, as well as our ability to execute on our business plan. 2019 is off to a fast start, after two months of trading we already have 451 homes signed, closed or reserved while the Project Arrow acquisition announced today proves that our team are able to source and execute accretive land acquisitions off-market.

 

We believe that our focus on starter-homes in the private Build-to-Sell segment, private rental opportunities (PRS) across our business, and Mixed-Tenure schemes for local authorities is the right one to allow us to become a profitable and resilient homebuilder across the cycle. Our commitment to health and safety, customer service and product innovation is central to our mission. We are very proud to be named one of Ireland's Great Places to Work and the first homebuilder to receive such recognition. 

 

We thank our shareholders for their ongoing support."

 

Outlook

Glenveagh's market backdrop remains very favourable with significant demand for housing, particularly starter-homes. With a significant portion of our costs agreed and 451 units sold, signed or reserved, we have strong visibility on delivering our unit guidance of 725 for the period. We remain on track to deploy the remaining €90 million share placing proceeds.

 

Results Presentation

A conference call for analysts and investors will take place at 8.30am (GMT) this morning to present the financial and operational results followed by a Q&A session. Dial-in details as follows:

·     Ireland +353 (0) 1 2460271 / UK +44 (0) 20 3059 2697 / USA +1 347 532 1806;

·     Conference PIN: 5115865 followed by *0;

·     Click this link to register for the conference.

 

 

 

For further information please contact:

Investors:

Media:

Glenveagh Properties PLC

 

Justin Bickle (CEO)

 

Michael Rice (CFO)

 

Conor Murtagh (Director, Strategy & IR)

 

investors@glenveagh.ie

Gordon MRM

 

Ray Gordon 087 241 7373

 

David Clerkin 087 830 1779

 

glenveagh@gordonmrm.ie

 

Note to Editors

Glenveagh Properties PLC is a leading Irish homebuilder listed on Euronext Dublin and the London Stock Exchange. With a focus on strategically located developments in the Greater Dublin Area, Cork, Limerick and Galway, the Group comprises two complementary divisions, Glenveagh Homes and Glenveagh Living.

Glenveagh Homes delivers high quality starter homes to its private and institutional customers with selective developments of mid-size and executive houses and apartments in areas of high demand.

Glenveagh Living delivers houses and apartments for the public sector and institutional investors. Its Partnerships business focusses on mixed-tenure and joint venture opportunities with the public sector in Ireland, while its PRS business delivers large-scale private rental product for institutional investors.

www.glenveagh.ie

 

 

 

Glenveagh Properties PLC: Business, Financial and Market Review

 

1.   Business Review

 

i.    Our Development Land

In 2018 we moved quickly to de-risk our long-term sales objectives by assembling a starter-home focussed landbank with affordability and value-for-money at its core. Our landbank was assembled at attractive rates in the context of both cost per site (€50k vs €56k at IPO) and site cost as a percentage of NDV (17% vs 22% at IPO).

The Group's acquisitions occurred largely off market and our landbank now comprises over 12,600 units. Our sites are primarily located in the GDA (81%) with approximately 85% of the landbank sitting within our Homes business and 67% of the total units are expected to be houses (33% apartments), which is consistent with the land strategy we laid out at IPO.

Glenveagh is now positioned to deliver housing to the deepest segments of the market with 74% of Build-to-Sell units on forthcoming developments priced at €350k or less. With an average site size of approximately 265 units coupled with a focus on starter-homes, the portfolio is positioned to generate returns in the current mortgage and market environment within a short time-frame and has multiple exit options as outlined above.

 

ii.   Planning

98% of our lands are zoned residential. We have the necessary Full Planning Permission ("FPP") in place to deliver all of our 2019 units with limited risk attaching to 2020. To further de-risk our near-term unit delivery targets and ensure we have 'shovel ready' sites available in the medium-term, we are highly active in the fast-track Strategic Housing Development ("SHD") planning process with in excess of 5,500 units at various stages of planning during 2018 and 2019. Our key planning objectives are to: add additional units to our 'shovel ready' portfolio; re-plan an element of our existing permissions to ensure we get the full benefits of product standardisation (particularly house type and layout); and where appropriate, increase densities on our sites.

 

iii.  Construction Progress

We are now actively constructing on 15 sites. With over 1,100 units under construction during 2018 we have substantially de-risked our delivery targets for 2019 (725) and 2020 (1,000). Works have commenced at Maryborough Ridge (Mount Woods), Kilcock (Ledwill Park) and Blackrock Villas, all of which are delivering units in 2019 / early 2020. Further site openings for 2019 will include Stamullen, Hollystown and Leixlip.

 

iv.  Sales

The Group finished 2018 with 275 unit sales. Performance on our starter-home schemes was strong despite show homes at Taylor Hill and Cluain Adain not opening until May and July respectively.

Sales for 2019 are off to a strong start with 451 units sold, signed or reserved at 5 March. This does not include our Herbert Hill development (90 units) which we expect to dispose of as a single transaction later in 2019. 2019 sales will benefit from a number of factors including:

·     five new site launches at Knightsgate, Semple Woods, Ledwill Park, Mount Woods and Blackrock Villas;

·     the prospective sale of our Herbert Hill development;

·     full-year of show home availability at Taylor Hill and Cluain Adain;

·     our Marina Village show apartments opening in H1; and

·     units available to our sales team earlier in the period due to strong construction progress.

 

v.   Glenveagh Living ("Living")

Our Living business continues to focus on the PRS and Mixed-Tenure segments referenced above, together with seeking to undertake Joint Ventures with appropriate counter-parties in the Irish market.

PRS

During 2018 the Living business significantly progressed its highly attractive 1,850+ unit PRS land portfolio in terms of master planning, and design, and submitted its first fast-track planning application in respect of its East Road site in the Dublin Docklands for 560 units (against a 450 units initial underwrite). The balance of the portfolio will proceed through the application phase during 2019 with construction due to commence on East Road (conditional on planning) in 2020.

 

Given the scarcity value embedded in our PRS portfolio, three quarters of which was directly sourced off-market, the Living team have begun to explore their exit options for these sites, which it believes will likely become effective after planning is obtained in each case. The default exit structure is to forward fund / forward sell the existing portfolio either as a single portfolio or on an individual asset basis to institutional investors. We believe that such structures will become more common in the Irish market going forward and can lock in certainty of returns and outcomes for the Group and generate attractive ROCE.

Mixed-Tenure and Joint Ventures

During the past 12 months our Living team has spent significant time evaluating the benefits and advantages of undertaking Partnerships in Ireland in addition to delivering starter-homes (through Glenveagh Homes) and our PRS schemes across our business.

 

Glenveagh has identified a pipeline of over 5,000 units which are likely to be tendered by local authorities in the coming years. Of that pipeline, Glenveagh is actively tendering on schemes which, if awarded, could deliver up to 2,000 units across the three tenure types (private for sale, PRS and social / affordable). We are excited about the prospects of becoming a leading delivery partner of housing with local authorities and approved housing bodies ("AHBs") in Ireland and look forward to making demonstrable progress towards our longer-term goals during 2019.  

 

2.   Financial Review

 

i.    Group performance

2018 was a year of significant growth for Glenveagh and delivered a strong operational and financial performance. The total unit completions for the year were 275 units with overall group revenue of €84.2 million.

The Group's revenue from the 275 units equated to €79.0 million. Over 90% of these units came from our developments aimed at first-time buyers and the demand in this segment of the market remains very strong which is evident from our Average Selling Price ("ASP") for the year of €287k.

The Group's gross profit for the year amounted to €15.3 million with a corresponding gross margin of 18.2%. This strong margin performance demonstrates that the Group's target of 20% gross margin in 2020 is achievable.

Our operating loss pre-exceptional items for the year was €2.1 million. The Group's central costs for the year were €17.2 million, which along with €0.2 million of depreciation and amortisation gives total administrative expenses pre-exceptional items of €17.4 million. This investment in our central functions demonstrates our commitment to delivering the Group's medium-term operational and financial targets.

The exceptional costs of €0.4 million incurred in the year relate to certain costs and fees on the equity placing in August 2018.

ii.   Balance Sheet

The Group's net asset value has increased to €843.1 million at 31 December 2018 (2017: €640.7 million), with the increase predominantly due to the equity placing.

The Group has shown substantial growth during the year with land and development rights increasing to €618 million (2017: €217.0 million), which equates to c.11,850 units at 31 December 2018. The Group has also invested heavily in work in progress with a significant operational ramp up from five active sites in the prior year to 14 and a related work in progress balance of €101.0 million at year end (2017: €11.1 million). The investment in the land portfolio and work in progress has been financed through the Group's net cash balances, which have decreased to €130.7 million at 31 December 2018 (2017: €351.8 million).

iii.  Cash Flow

The Group deployed significant cash in the year as we continued the ramp up phase of the business. The cash outflows predominantly related to the €446 million deployed on land (including the acquisition of a subsidiary undertakings) and construction activity. 

These significant cash movements, along with a number of other operational cash flows, gave rise to a net cash outflow for the Group of €221.1 million in the year, with the Group in a net cash position of €130.7 million (2017: €351.8 million) at year-end.

During the year, the Group drew down €26.0 million from the RCF in two separate tranches. The full amount was repaid prior to year-end to minimise the interest cost of the facility. We expect to utilise this debt facility to a greater extent in 2019 to finance the working capital requirements of new and existing sites.

3.   Market Review

 

i.    The Land Market

The vacant site levy was 3% in 2018 and 7% in 2019 and is now impacting vendors' disposal decisions and timing thereof. There is a limited pool of prospective acquirers for large starter-home sites given the capital and delivery capability requirements to convert such sites. Furthermore, smaller sites are now being recycled at attractive rates by private builders with competition reduced on these sites.

The Group remains focussed on disciplined deployment of capital in line with key underwriting criteria (financial and operational).  We expect to deploy the remainder of the proceeds from our 2018 share consistent with our previously stated timetable.

 

ii.   Build-to-Sell ("BTS")

The strong demand for housing in Ireland is driven by the fundamentals of population growth (net migration 34k[3]), household formation, employment and affordability (wage growth 4.1%3). Notwithstanding that, chronic undersupply continues to be a feature of housing delivery with c.18k dwellings delivered in 2018 versus demand estimates of 36k+[4].

We believe that the demand / supply imbalance in the residential sector will continue for some years, and ought to favour well capitalised homebuilders like Glenveagh who can deliver a significant number of homes each year using modern construction methods and reliable supply chains.

Glenveagh's view is that the deepest and most attractive part of the residential market is starter-homes, particularly in the GDA and other cities like Cork. Building modern, value for money and space efficient single-family homes is required in a growing economy like Ireland, and this is Glenveagh's core product. 

iii.  Private Rental Sector ("PRS")

The structural shift to rental is continuing in the Irish market and particularly in Dublin. Vacancy rates are low (1.4%3) and rental growth remains strong (9.8%[5]). PRS has emerged as a recognised asset class and now accounts for 30% of real estate investment in Ireland (40% in Dublin[6]). Prime PRS Residential Net Initial Yields moved to below 4%[7] in February 2019 although Dublin's PRS yields remain higher than other major European gateway cities.

Based on our experience overseas, Glenveagh believe that PRS will be an increased feature of housing in Ireland in the coming years. PRS is attractive in Dublin given its young and growing population, the expectation of significant future population growth (30%+ forecast from 2010 to 2046[8]), low vacancy rates and attractive rental growth rates.

iv.  Mixed-Tenure

The chronic housing shortage in Ireland is not just restricted to the private sector. The public sector housing crisis in Ireland is acute, with over 70,000 on waiting lists for appropriate accommodation.

The largest landowner in the Irish market is the State, either through major governmental agencies, or via local authorities. Our view is that, as in the UK, an increasing feature of housing provision in Ireland in the coming years will be through Mixed-Tenure schemes. This is part of our Partnership offering at Glenveagh Living but it draws on skills and resources embedded across our entire business. 

There are a number of government initiatives designed to increase the provision of housing in Ireland or which seek to alleviate the current housing crisis. For example, Rebuilding Ireland's goal is to ramp up delivery of housing from its current undersupply across all tenures. The Land Development Agency ("LDA") was formed during 2018 with €1.25bn of commitments to build 150,000 homes over next 20 years. Glenveagh looks forward to working with the LDA as it gets established and to being a leading contributor to the supply of housing in partnerships with these agencies in the future.

 

 

 

Ends

 


Consolidated statement of profit or loss and other comprehensive income

For the financial year ended 31 December 2018

 

 

Year Ended 31 December 2018

Period from incorporation on 7 August 2017 to 31 December 2017

 

Before

 

 

Before

 

 

 

exceptional

Exceptional

 

exceptional

Exceptional

 

 

items

items

Total

items

items

Total

 

€'000

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

Revenue

84,179

-

84,179

1,425

-

1,425

Cost of sales

(68,887)

-

(68,887)

      (901)

        

      (901)

 

                  

                  

                  

                  

                  

                  

Gross profit

15,292

-

15,292

524

-

524

 

 

 

 

 

 

 

Administrative expenses

(17,438)

(409)

(17,847)

(4,187)

(556)

(4,743)

Founder Shares: Share-based payment

 

 

 

 

 

 

expense

-

-

-

         -

   (47,509)

   (47,509)

 

                  

                  

                  

                  

                  

                  

Operating loss

(2,146)

(409)

(2,555)

(3,663)

(48,065)

(51,728)

 

 

 

 

 

 

 

Finance expense

(1,414)

-

(1,414)

(69)

-

(69)

Finance income

-

-

-

       16

         -

       16

 

                  

                  

                  

                  

                  

                  

Loss before tax

(3,560)

(409)

(3,969)

(3,716)

(48,065)

(51,781)

 

 

 

 

 

 

 

Income tax credit

              39

                 -

              39

            397

                 -

            397

 

 

 

 

 

 

 

Loss after tax attributable to the

 

 

 

 

 

 

owners of the Company

(3,521)

(409)

(3,930)

(3,319)

(48,065)

(51,384)

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

Other comprehensive income

                 -

                 -

                 -

                -

                 -

                -

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

 

   (3,930)

 

 

   (51,384)

attributable of the owners of the Company

 

 

                  

 

 

                  

 

 

 

      

 

 

 

Basic and diluted loss per share (cents)

 

 

    (0.53)  

 

 

    (13.73)  

 

 

 

                  

 

 

                  

 

 

 

 

 

 

 

 

Consolidated balance sheet

as at 31 December 2018

 

 

31 December

31 December

 

 

2018

2017

 

 

€'000

€'000

 

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

11,497

1,476

Intangible assets

727

75

Deferred tax asset

208

151

Restricted cash

1,500

1,500

 

                  

                  

 

13,932

3,202

 

                  

                  

Current assets

 

 

Inventory

718,862

228,089

Trade and other receivables

14,507

69,374

Income tax receivable

340

326

Cash and cash equivalents

130,701

351,796

 

                  

                  

 

864,410

649,585

 

                  

                  

 

 

 

Total assets

878,342

652,787

 

                  

                  

Equity

 

 

Share capital

1,052

867

Share premium

879,281

666,381

Retained earnings

(80,661)

(74,112)

Share-based payment reserve

43,443

47,548

 

                  

                  

Total equity

843,115

640,684

 

                  

                  

Liabilities

 

 

Non-current liabilities

 

 

Trade and other payables

1,803

1,903

Finance lease liability

5

170

 

                  

                  

 

1,808

2,073

 

                  

                  

Current liabilities

 

 

Trade and other payables

   21

33,386

9,946

Finance lease liability

    28

33

84

 

                  

                  

 

33,419

10,030

 

 

 

 

                  

                  

Total liabilities

35,227

12,103

 

                  

                  

 

 

 

Total liabilities and equity

878,342

652,787

 

                  

                  
           

 

 

Consolidated statement of changes in equity

for the financial year ended 31 December 2018

 

 

Share Capital

 

Share-based

 

 

 

Ordinary

Founder

Share

payment

Retained

Total

 

shares

shares

premium

reserve

earnings

equity

 

€'000

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

Balance as at 1 January 2018

667

200

666,381

47,548

(74,112)

640,684

 

 

 

 

 

 

 

Total comprehensive loss for the financial year

 

 

 

 

 

 

Loss for the financial year

-

-

-

-

(3,930)

(3,930)

Other comprehensive income

-

-

-

-

-

-

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

667

200

666,381

47,548

(78,042)

636,754

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

Transactions with owners of the Company

 

 

 

 

 

 

Issue of ordinary shares for cash

185

-

212,900

-

-

213,085

Share issue costs

-

-

-

-

(7,131)

(7,131)

Conversion of Founder Shares to ordinary shares

19

(19)

-

(4,512)

4,512

-

Equity-settled share-based payments

-

-

-

407

-

407

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

204

(19)

212,900

(4,105)

(2,619)

206,361

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

Balance as at 31 December 2018

871

181

879,281

43,443

(80,661)

843,115

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

Consolidated statement of changes in equity

for the period from incorporation on 9 August 2017 to 31 December 2017

 

 

Share Capital

 

Share-based

 

 

 

Ordinary

Founder

Share

payment

Retained

Total

 

shares

shares

premium

reserve

earnings

equity

 

€'000

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

Balance as at 9 August 2017

-

-

-

-

-

-

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

 

 

 

 

 

Loss for the period

-

-

-

-

(51,384)

(51,384)

Other comprehensive income

-

-

-

-

-

-

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

-

-

-

-

(51,384)

(51,384)

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

Transactions with owners of the Company

 

 

 

 

 

 

Issue of ordinary shares for cash

752

-

551,819

-

-

552,571

Share issue costs

-

-

-

-

(22,728)

(22,728)

Re-designation as Founder Shares

(200)

200

-

-

-

-

Issue of ordinary shares related to business combinations

4

-

4,423

-

-

4,427

Issue of ordinary shares in consideration for inventories

111

-

110,139

-

-

110,250

Equity-settled share-based payments

-

-

-

47,548

-

47,548

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

667

200

666,381

47,548

(22,728)

692,068

 

                  

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

Balance as at 31 December 2017

667

200

666,381

47,548

(74,112)

640,684

 

                  

                  

                  

                  

                  

                  

 

Consolidated statement of cash flows

For the financial year ended 31 December 2018

 

 

 

Period from

 

 

incorporation

 

 

on 9 August

 

Year ended

2017 to 31

 

31 December

December

 

2018

2017

 

€'000

€'000

Cash flows from operating activities

 

 

Loss for the financial year/period

(3,930)

(51,384)

Adjustments for:

 

 

Depreciation and amortisation

235

110

Finance costs

1,414

69

Finance income

-

(16)

Equity-settled share-based payment expense

407

47,548

Tax credit

(39)

(397)

Loss on disposal of property, plant and equipment

18

-

 

                  

                  

 

(1,895)

(4,070)

Changes in:

 

 

Inventories

(432,031)

(116,902)

Trade and other receivables

11,076

(69,295)

Trade and other payables

23,126

11,612

 

                  

                  

Cash used in operating activities

(399,724)

(178,655)

 

 

 

Interest paid

(1,218)

(68)

Tax paid

(32)

(211)

 

                  

                  

 

 

 

Net cash used in operating activities

(400,974)

(178,934)

 

                  

                  

Cash flows from investing activities

 

 

Acquisition of plant, property and equipment

(10,622)

(309)

Acquisition of intangible assets

(564)

(38)

Cash acquired on acquisition

15

3,229

Transfer to restricted cash

-

(1,500)

Acquisition of subsidiary (net of cash acquired)

(13,663)

-

 

                  

                  

Net cash (used in) / from investing activities

(24,834)

1,382

 

                  

                  

 

 

 

Cash flows from financing activities

 

 

Proceeds from issue of share capital

213,085

552,571

Issue costs paid

(7,131)

(22,728)

Proceeds from loans and borrowings

26,000

-

Repayment of loans and borrowings

(26,000)

-

Transaction costs related to loans and borrowings

(1,025)

-

Payment of finance lease liabilities

(216)

(495)

 

                  

                  

Net cash from financing activities

204,713

529,348

 

                  

                  

 

 

 

Net (decrease)/increase in cash and cash equivalents

(221,095)

351,796

 

 

 

Cash and cash equivalents at the beginning of the year/period

 

351,796

 

-

 

                  

                  

Cash and cash equivalents at the end of the year/period

 

130,701

 

351,796

 

                  

                  

 

 

Notes to the consolidated financial statements 

For the financial year ended 31 December 2018

 

 

1      Reporting entity and basis of preparation

 

Glenveagh Properties PLC ("the Company") is domiciled in the Republic of Ireland. The Company's registered office is 15 Merrion Square North, Dublin 2. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as "the Group") and cover the financial year ended 31 December 2018. The comparative period was for the period from incorporation on 9 August 2017 to 31 December 2017. The Group's principal activities are the construction and sale of houses and apartments for the private buyer and local authorities.

 

The financial information set out in this document does not constitute the full statutory financial statements but has been derived from the consolidated financial statements for the year ended 31 December 2018, referred to as the 2018 Financial Statements. The 2018 Financial Statements are prepared under EU adopted International Financial Reporting Standards (IFRS).  The 2018 Financial Statements were authorised for issue by the Board of Directors on 5 March 2019, have been audited and have received an unqualified audit report. The financial information has been prepared under the historical cost convention as modified by use of fair values for share-based payments and business combinations. The Group's accounting policies detailed in note 8 below are extracted from the 2018 Financial Statements.

 

 

2      Statement of compliance

 

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS's) as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS regulation.

 

 

3      Functional and presentation currency

 

These consolidated financial statements are presented in Euro which is the Company's functional currency. All amounts have been rounded to the nearest thousand unless otherwise indicated.

 

 

4      Use of judgements and estimates

 

Management applies the Group's accounting policies as described in Note 8 when making critical accounting judgements, of which no individual judgement is deemed to have a significant impact upon the financial statements, apart from the estimation involved in assessing the carrying value of inventories as detailed below.

 

(a)    Carrying value of work-in-progress, estimation of costs to complete and impact on profit recognition

 

The Group holds inventories stated at the lower of cost and net realisable value. Such inventories include land development rights, work-in-progress and completed units. As residential development is largely speculative by nature, not all inventories are covered by forward sales contracts. Furthermore, due to the nature of the Group's activity and, in particular the scale of its developments and the length of the development cycle, the Group has to allocate site-wide development costs between units being built and/or completed in the current year and those for future years. It also has to forecast the costs to complete on such developments. These estimates impact management's assessment of the net realisable value of the Group's inventory balance and also determine the extent of profit or loss that should be recognised in respect of each development in each reporting period.

  

 

4      Use of judgements and estimates (continued)

 

In making such assessments and allocations, there is a degree of inherent estimation uncertainty. The Group has established internal controls designed to effectively assess and centrally review inventory carrying values and ensure the appropriateness of the estimates made. These assessments and allocations evolve over the life of the development in line with the risk profile, and accordingly the margin recognised reflects these evolving assessments, particularly in relation to the Group's long-term developments.

 

 

5      Measurement of fair values

 

A number of the Group's accounting policies and disclosures require the measurement of fair values, both for financial and non-financial assets and liabilities. Fair value is defined in IFRS 13, Fair Value Measurement, as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

 

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

Further information about the assumptions made in measuring fair values is included in the following notes:

 

·        Note 14 Share-based payments;

·        Note 25 Business combinations; and

·        Note 27 Financial instruments and financial risk management.

 

6     New standards and interpretations and adoption of new accounting policies

 

(i)         New standards effective in the financial year

 

IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments became effective in the financial year. Due to the transition methods chosen by the Group in applying these standards, comparative information throughout these financial statements has not been restated to reflect the requirements of the new standards.

 

(a)  IFRS 15 Revenue from Contracts with Customers

 

From 1 January 2018, IFRS 15, Revenue from Contracts with Customers replaced IAS 18 Revenue and IAS 11 Construction Contracts, setting out new revenue recognition criteria particularly with regard to performance obligations and assessment of when control of goods or services passes to the customer. 

The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially applying this standard at the date of initial application 1 January 2018. Based on the Group's assessment of IFRS 15, adoption of this standard had no impact on the prior period financial statements. The Group's new accounting policy is included in Note 8.

 

6      New standards and interpretations and adoption of new accounting policy (continued)

 

(i)         New standards effective in the financial year (continued)

 

(a) IFRS 15 Revenue from Contracts with Customers (continued)

 

Revenue - policy applicable before 1 January 2018

Revenue comprises the fair value of consideration received or receivable, net of value-added tax, rebates and discounts. Revenue is recognised once the value of the transaction can be reliably measured and the significant risks and rewards of ownership have been transferred.

 

Revenue represents the amounts receivable from the sale of houses and other fee income directly associated with property development, including asset advisory and construction services. Where the Group concludes that it operates as an agent for services rendered, (i.e. the Group takes no title, development or inventory risk) only commission earned is recognised as revenue. On the sale of homes, revenue is recognised at legal completion.

 

(b)  IFRS 9 Financial Instruments

 

IFRS 9 Financial Instruments came into effect on 1 January 2018 replacing IAS 39 Financial Instruments: Recognition and Measurement and requires changes to the classification and measurement of certain financial instruments from that under IAS 39. The Group has adopted IFRS 9 using the cumulative effect method with the effect of initially applying this standard at the date of initial application 1 January 2018. Based on an assessment performed of the key areas in scope of IFRS 9 which includes but is not limited to, additional disclosures required by IFRS 7 'Financial Instruments - Disclosures', the majority of the Group's financial assets and liabilities will continue to be accounted for on an identical basis under IFRS 9 as they were under IAS 39. Glenveagh adopted the new standard on the required effective date of 1 January 2018 and has not restated comparative information. The Group's new accounting policy is included in Note 8.    

 

Financial instruments - Policy applicable before 1 January 2018

 

Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within administration expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against administration expenses in the income statement.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash balances in hand and at the bank, including bank overdrafts repayable on demand.

 

Cash and cash equivalents that are not available for use by the Group are presented as restricted cash. Amounts of restricted cash which cannot be exchanged or used to settle a liability for at least 12 months after the end of the reporting period are classified as non-current assets.

 

 

6      New standards and interpretations and adoption of new accounting policy (continued)

 

(i)         New standards effective in the financial year (continued)

 

(b)  IFRS 9 Financial Instruments (continued)

 

Financial instruments - Policy applicable before 1 January 2018 (continued)

 

Trade and other payables

Trade and other payables on normal terms are not interest bearing and are stated at their nominal value which is considered to be their fair value. Trade payables on extended terms are recorded at their fair value at the date of acquisition of the asset to which they relate. The discount to nominal value is amortised over the period of the credit term and charged to finance costs.

 

Financial instruments

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held to maturity financial assets, loans and receivables and available for sale financial assets.

 

The Group classifies non-derivative financial liabilities into the following categories: financial liabilities at fair value through profit or loss and other financial liabilities.

 

·      Non-derivative financial assets and financial liabilities - recognition and derecognition

 

The Group initially recognises loans and receivables and debt securities issued on the date when they are originated. All other financial assets and financial liabilities are initially recognised on the trade date when the entity becomes a party to the contractual provisions of the instruments.

 

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial assets expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred, or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.

 

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

 

Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

 

·      Non-derivative financial assets - measurement

 

These assets are initially measured at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, as adjusted for any impairments.

 

·      Non-derivative financial liabilities (including interest bearing loans and borrowings) - measurement

 

Non-derivative financial liabilities are initially measured at fair value less directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

 

 

6      New standards and interpretations and adoption of new accounting policy (continued)

 

(b)  IFRS 9 Financial Instruments (continued)

 

Financial instruments - Policy applicable before 1 January 2018 (continued)

 

        Financial Instruments (continued)

 

For interest-bearing borrowings any difference between initial carrying amount and redemption value is recognised in profit or loss over the period of the borrowings on an effective interest basis.

 

·      Derivative financial instruments

 

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any directly attributable transaction costs are recognised in profit or loss as incurred.

 

Embedded derivatives are separated from the host contract and accounted for at fair value through profit or loss if certain criteria are met.

 

Impairment of financial assets

An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in profit or loss when they occur and are reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment is reversed through profit or loss.

 

(ii)        Adoption of new accounting policies

 

There were also two other changes to the Group's significant accounting policies since the last annual financial statements which were adopted due to specific transactions entered into during the year. The first change is the adoption of an accounting policy in respect of joint operations in accordance with IFRS 11 Joint Arrangements. This was required as a result of the transaction described in Notes 19 and 29 in respect of the Group's interests in sites at The Square Shopping Centre, Tallaght and Gateway Retail Park, Knocknacarra, Co. Galway. The second change was the adoption of an accounting policy in respect of interest bearing loans and borrowings following the execution of a revolving credit facility (RCF) in the financial year as set out in Note 22. Both new accounting policies are included in Note 8.

 

A number of other new standards are also effective from 1 January 2018 but they do not have a material effect on the consolidated financial statements.

 

(iii)       Standards not yet effective

 

IFRS 16 Leases addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. The standard replaces IAS 17 Leases, and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2019 and earlier application is permitted subject to EU endorsement. 

  

 

6      New standards and interpretations and adoption of new accounting policies (continued)

 

(iii)            Standards not yet effective (continued)

 

The Group will not early adopt the standard and will therefore apply IFRS 16 for the first time for the financial year ending 31 December 2019.

 

The Group is currently evaluating the potential impact on its consolidated financial statements resulting from the application of IFRS 16 by carrying out a review of its contracted leases. Due to the limited number of leases to which Group is party and the profile of those leases, the adoption of IFRS 16 will not have a material impact on the Group's consolidated financial statements. Notes 28 and 30 outline the extent of the Group's lease commitments at 31 December 2018.

 

(iv)       Annual improvements to IFRS Standards 2015-2017 (issued on 12 December 2017) 

 

The changes under the Annual Improvements to IFRS Standards 2015 - 2017 Cycle are in relation to the following:

 

-       IFRS 3 Business Combinations: This amendment clarifies that a company remeasures its previously held interest in a joint operation when it obtains control of the business.

 

-       IFRS 11 Joint Arrangements: This amendment clarifies that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.

-       IAS 12 Income Taxes: This amendment clarifies that a company accounts for all income tax consequences of dividend payments in the same way.

-       IAS 23 Borrowing Costs: This amendment clarifies that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale. 

 

(v)        IFRIC 23 Uncertainty over Income tax treatments:

 

IFRIC 23 clarifies the application of recognition and measurement requirements of IAS 12 Income Taxes when there is uncertainty over income tax treatments. The interpretation specifically provides guidance on considering uncertain tax treatments separately or together, examination by tax authorities, the appropriate method to reflect uncertainty and accounting for changes in facts and circumstances. 

 

 

7      Going concern

 

The Group has recorded a loss before tax of €3.9 million (2017: €51.2 million). The Group has a cash balance of €130.7 million (2017: €351.8 million) and has committed undrawn funds available of €125.0 million. Having considered the Group's cash flow forecasts, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to prepare the financial statements on a going concern basis.

 

 

8      Significant accounting policies

 

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements, except if mentioned otherwise.

 

8.1 Basis of consolidation

 

(i)    Business combinations

 

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

 

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured, and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

 

(ii)   Subsidiaries

 

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

 

(iii)  Joint operations

 

Joint operations arise where the Group has joint control of an operation with other parties, in which the parties have direct rights to the assets and obligations of the operation. The Group accounts for its share of the jointly controlled assets and liabilities and income and expenditure on a line by line basis in the consolidated financial statements.

      

(iv)  Transactions eliminated on consolidation

 

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.

 

8.2 Revenue - policy applicable from 1 January 2018

 

The Group develops and sells residential properties. Revenue is recognised at the point in time when control over the property has been transferred to the customer, which occurs at legal completion. Revenue is measured at the transaction price agreed under the contract.

 

8.3 Expenditure

 

Expenditure recorded in inventory is expensed through cost of sales at the time of the related property sale. The amount of cost related to each property includes its share of the overall site costs. Administration expense is recognised in respect of goods and services received when supplied in accordance with contractual terms.

 

 

8      Significant accounting policies (continued)

 

8.4 Taxation

 

Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in the income statement, except to the extent that it relates to items recognised directly in other comprehensive income or equity.

 

(i)    Current tax

 

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the financial year and any adjustment to the tax payable or receivable in respect of previous periods. The amount of current tax payable or receivables is the best estimate of the tax amount expected to be

paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

 

Current tax assets and liabilities are offset only if certain criteria are met.

 

(ii)   Deferred tax

 

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

 

    Deferred tax is not recognised for:

-       temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

-       temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

-       taxable temporary differences arising on the initial recognition of goodwill.

 

Deferred tax is measured at the tax rates that are expected to apply in the periods in which temporary differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

 

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences and future profitability. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

8.5 Share-based payment arrangements

 

The grant date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is

 

 

8      Significant accounting policies (continued)

 

8.5 Share-based payment arrangements (continued)

 

measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

 

8.6 Exceptional items

 

Exceptional items are those that are separately disclosed by virtue of their nature or amount in order to highlight such items within the consolidated statement of profit or loss for the financial year. Group management exercises judgement in assessing each particular item which, by virtue of its scale or nature, should be highlighted as an exceptional item. Exceptional items are included within the profit or loss caption to which they relate.

 

In the current year, listing costs associated with the placing of shares in the Group's Firm Placing and Open Offer (€0.4 million) are considered exceptional items (see Note 11). The directors believe that separate presentation of these exceptional expenses is useful to the reader as it allows clear presentation of the results of the underlying business and is relevant for an understanding of the Group's performance in the financial year.

 

8.7 Property, plant and equipment

 

Property, plant and equipment is carried at historic purchase cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is provided to write off the cost of the assets on a straight-line basis to their residual value over their estimated useful lives at the following annual rates:

 

·        Buildings                                            2.5%

·        Plant and machinery                          14-20%

·        Fixtures and fittings                            20%

·        Computer Equipment                         33%

 

The assets' residual values, carrying values and useful lives are reviewed on an annual basis and adjusted if appropriate at each reporting date.

 

Where an impairment is identified, the recoverable amount of the asset is identified and an impairment loss, where appropriate, is recognised in the statement of profit or loss and other comprehensive income.

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within administration expenses in the statement of profit or loss and other comprehensive income.

 

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

8.8 Intangible assets - computer software

 

Computer software is capitalised as intangible assets as acquired and amortised over its estimated useful life of 3 years, in line with the period over which economic benefit from the software is expected to be derived.

 

The assets' useful economic lives and residual values are reviewed and adjusted, if appropriate, at each reporting date.

 
 

 

8      Significant accounting policies (continued)

 

8.9 Inventory

 

Inventory comprises property in the course of development, completed units, land and land development rights.

 

Inventories are valued at the lower of cost and net realisable value. Direct cost comprises the cost of land, raw materials and development costs but excludes indirect overheads. Land purchased for development, including land in the course of development, is initially recorded at cost.

 

Where such land is purchased on deferred settlement terms, and the cost differs from the amount that will subsequently be paid in settling the liability, this difference is charged as a finance cost in the statement of profit or loss and other comprehensive income over the period to settlement.

 

 

8.10 Financial instruments - policy applicable from 1 January 2018

 

Financial assets and financial liabilities

Under IFRS 9, financial assets and financial liabilities are initially recognised at fair value and are subsequently measured based on their classification as described below. Their classification depends on the purpose for which the financial instruments were acquired or issued, their characteristics and the Group's designation of such instruments. The standards require that all financial assets and financial liabilities be classified as fair value through profit or loss ("FVTPL"), amortised cost, or fair value through other comprehensive income ("FVOCI").

 

Classification of financial instruments

The following summarises the classification and measurement the Group has elected to apply to each of its significant categories of financial instruments:

 

 

 

 

Original

New

 

 

 

carrying

carrying

 

 

 

amount

amount

 

 

 

under

under

 

 

IFRS 9

IAS 39

IFRS 9

Type

IAS 39 classification

Classification

€'000

 €'000

Financial assets

 

 

 

 

Cash and cash equivalents

Loans and receivables

Amortised cost

130,701

130,701

Other receivables

Loans and receivables

Amortised cost

70

70

Restricted cash

Loans and receivables

Amortised cost

1,500

1,500

Construction bonds

Loans and receivables

Amortised cost

3,377

3,377

 

 

 

 

 

Financial liabilities

 

 

 

 

Bank indebtedness

Other liabilities

Amortised cost

-

-

Accounts payable and

accrued liabilities

Other liabilities

Amortised cost

 

35,189

 

35,189

 

 

 

 

 

 

 

 

 

8      Significant accounting policies (continued)

 

8.10 Financial instruments - policy applicable from 1 January 2018 (continued)

 

Cash and cash equivalents

Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. Interest earned or accrued on these financial assets is included in other income.

Other receivables

Such receivables are included in current assets, except for those with maturities more than 12 months after the reporting date, which are classified as non-current assets. Loans and other receivables are included in trade and other receivables on the consolidated balance sheets and are accounted for at amortised cost. These assets are subsequently measured at amortised cost. The amortised cost is reduced by impairment losses. IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' model (ECL model). The new impairment model applies to financial assets measured at amortised cost, contract assets and debt instruments at FVOCI, but not to investment in equity instruments. Interest income and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

 

Other liabilities

Such financial liabilities are recorded at amortised cost and include all liabilities.

 

Fair value through profit and loss

Financial instruments in this category are recognised initially and subsequently at fair value. Gains and losses arising from changes in fair value are presented within the profit and loss account in the consolidated statement of profit and loss and other comprehensive income in the period in which they arise. Financial assets and liabilities at FVTPL are classified as current, except for the portion expected to be realized or paid more than 12 months after the reporting date, which is classified as non-current.

 

Derivatives

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

 

8.11 Provisions

 

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle that obligation, and the amount has been reliably estimated.

 

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability, where the effect of discounting is considered significant. The unwinding of the discount is recognised as a finance cost.

 

8.12 Pensions

 

The Company operates a defined contribution scheme. The assets of the scheme are held separately from those of the Company in a separate fund. Obligations for contributions to defined contribution plans are expensed as the related service is provided.

 

 

 

8      Significant accounting policies (continued)

 

8.13 Finance lease liabilities

 

Leases of property, plant and equipment that transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.

 

8.14 Share capital

 

(i)    Ordinary shares

 

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity (retained earnings).

 

(ii)   Founder Shares

 

Founder Shares were initially issued as ordinary shares and subsequently re-designated as Founder Shares. Following re-designation, the instruments are accounted for as equity-settled share-based payments as set out at Note 8.5 above.

 

8.15 Finance income and costs

 

The Group's finance income and finance costs include:

 

·        Interest income

·        Interest expense

 

Interest income and expense is recognised using the effective interest method.

 

9      Segmental information

 

The Group has considered the requirements of IFRS 8 Operating Segments in the context of how the business is managed and resources are allocated.

 

The Group is organised into two key reportable operating segments being Glenveagh Homes and Glenveagh Living. Internal reporting to the Chief Operating Decision Maker ("CODM") is provided on this basis. The CODM has been identified as the Executive Committee (as detailed in the Corporate Governance Statement).

 

The Group currently operates solely in the Republic of Ireland and therefore no geographically segmented financial information is provided.

 

Glenveagh Homes

Homes develops and builds starter, mid-size and executive and high-end homes (both houses and apartments) for the residential market in Ireland, with a focus principally on the Greater Dublin Area, as well as the Cork, Limerick and Galway regions.

 

 

 

 

9      Segmental information (continued)

 

Glenveagh Living

Living's strategic focus is on designing, developing and delivering residential solutions for institutional investors, social and affordable landlords, government entities and strategic landowners. Glenveagh Living intends to augment its operations with partnership arrangements to design, develop and deliver residential schemes for purchase by institutional investors, approved housing authorities and governmental and local authorities in Ireland. Glenveagh Living is also the Group's delivery platform for Private Rental Sector ("PRS") projects, which are residential projects that governmental authorities promote by offering a range of financial incentives, such as by granting guarantees and other financial risk sharing incentives, in order to increase the supply of properties in the build-to-rent market. Glenveagh Living develops residential schemes for private sector investors in PRS projects.

 

 

Segmental financial results

 

                                                                            

 

 

 

 

Period from

 

 

 

 

Incorporation

 

 

 

 

On 9 August

 

 

 

Year ended

2017 to 31

 

 

 

31 December

December

 

 

 

2018

2017

 

 

 

€'000

€'000

 

 

 

 

 

 

Revenue

 

 

 

 

Glenveagh Homes

 

84,115

1,425

 

Glenveagh Living

 

64

-

 

 

 

                  

                  

 

 

 

 

 

 

Revenue for reportable segments

 

84,179

1,425

 

 

 

                  

                  

 

 

 

 

 

 

Operating profit/(loss)

 

        

        

 

Glenveagh Homes

 

6,311

(3,127)

 

Glenveagh Living

 

(1,306)

(93)

 

 

 

                  

                  

 

Operating profit/(loss) for reportable segments

 

        

5,005

      

  (3,220)

 

 

 

                  

                  

 

 

 

 

 

 

Reconciliation to results for the year/period

 

 

 

 

Segment results - operating profit/(loss)

 

5,005

(3,220)

 

Finance expense

 

(1,414)

(69)

 

Finance income

 

-

16

 

Corporate expenses

 

(7,560)

(999)

 

Share-based payment expense: Founder Shares

 

-

(47,509)

 

 

 

                  

                  

 

 

 

 

 

 

Loss before tax

 

(3,969)

(51,781)

 

 

 

                  

                  

 

 

9      Segmental information (continued)

 

Segment assets and liabilities                                        

 

 

 

2018

2017

 

 

 

Glenveagh

Glenveagh

 

Glenveagh

Glenveagh

 

 

 

 

Homes

Living

Total

Homes

Living

Total

 

 

 

€'000

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

 

 

 

Segment assets

 

632,503

130,324

762,827

260,237

44,621

304,858

 

 

 

                  

                  

 

                  

                  

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Consolidated Balance Sheet

 

 

 

 

 

 

 

 

Deferred tax asset

 

 

 

71

 

 

14

 

Trade and other receivables

 

 

 

1,117

 

 

8,769

 

Cash and cash equivalents

 

 

 

106,650

 

 

339,146

 

Property, plant and equipment

 

 

 

7,677

 

 

-

 

 

 

 

 

                  

 

 

                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

878,342

 

 

652,787

 

 

 

 

 

                  

 

 

                  

 

Segment liabilities

 

30,708

2,660

33,368

11,228

484

11,712

 

 

 

                  

                  

 

                  

                  

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Consolidated Balance Sheet

 

 

 

 

 

 

 

 

Trade and other payables

 

 

 

1,663

 

 

391

 

Interest accrual

 

 

 

196

 

 

-

 

 

 

 

 

                  

 

 

                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,227

 

 

12,103

 

 

 

 

 

                  

 

 

                  

 

 

10

Revenue

 

 

 

Year ended 31 December 2018

Period from incorporation      on 9 August 2017   to 31 December 2017

 

 

€'000

       €'000

 

 

 

 

 

Residential property sales

78,971

-

 

Land sales

4,950

-

 

Income from property rental and other income

258

-

 

Asset advisory and management services

-

147

 

Construction services

-

1,278

 

 

                  

                  

 

 

 

 

 

 

84,179

1,425

 

 

                  

                  

 

Revenue earned by the Group in the prior financial period is in respect of certain contractual services undertaken on behalf of a related party as disclosed in the prior period consolidated financial statements.

 

 

11

Exceptional items

 

 

 

Year ended 31 December 2018

Period from incorporation      on 9 August 2017   to 31 December 2017

 

 

€'000

       €'000

 

 

 

 

 

 

 

Administration expenses

409

556

 

 

Founder Shares share-based payment expense (Note 14)

-

47,509

 

 

 

                  

                  

 

 

 

 

 

 

409

48,065

 

 

                  

                  
           

 

In the current financial year, listing costs of €0.4 million relating to the Group's Firm Placing and Open Offer have been classified as exceptional items in accordance with the Group's accounting policy set out at Note 8.6.

 

In the prior financial period, costs of €0.6 million relating to the Company's Initial Public Offering listing fees and other related expenses and €47.5 million relating to Founder Shares (see Note 14) were classified as exceptional items in the prior financial period.

 

 

 

 

12

Other information

 

 

 

Year ended 31 December 2018

Period from incorporation      on 9 August 2017 to 31 December 2017

 

 

€'000

€'000

 

 

 

 

 

Amortisation of intangible assets (Note 18)

61

50

 

Depreciation of property, plant and equipment (Note 17)*

645

75

 

Operating lease rentals

771

189

 

Employment costs (Note 13)

19,885

50,569

 

Loss on disposal of property, plant and equipment

18

-

 

 

                  

                  

 

 

*Includes €0.5 million (2017: €0.015 million) capitalised in inventory during the year ended 31 December 2018

 

 

 

 

 

Auditor's remuneration

 

 

 

Audit of Group, Company and subsidiary financial statements*

 

120

 

100

 

Other assurance services

315

728

 

Tax advisory services

48

27

 

Tax compliance services

29

41

 

 

                  

                  

 

 

 

 

 

 

512

896

 

 

                  

                  

 

 

 

 

 

Directors' remuneration

 

 

 

Salaries, fees and other emoluments

1,963

335

 

Pension contributions

40

9

 

Founder Shares share-based payment expense (Note 14)

-

47,509

 

 

                   

                  

 

 

 

 

 

 

2,003

47,853

 

 

                   

                  
         

 

*Included in the auditor's remuneration for the Group is an amount of €0.015 million (2017: €0.015 million) that relates to the Company's financial statements.

 

 

13    Employment costs

 

The average number of persons employed by the Group (including executive directors) during the financial year was 200 (Executive Committee: 5; Construction: 126; and Other: 69). (2017: Executive Committee: 5; Construction: 64; and Other: 35)

 

The aggregate payroll costs of these employees for the financial year were:

 

 

 

 

Period from incorporation on 9 August 2017 to 31 December 2017

 

 

 

 

Year ended

 

 

 

 

 

 

 

31 December

Before

 

 

 

 

 

 

2018

exceptional

Exceptional

 

 

 

 

 

Total

items

items

Total

 

 

 

 

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

 

 

Wages and salaries

 

 

16,998

2,660

-

2,660

 

Social welfare costs

 

 

1,685

280

-

280

 

Pension costs - defined contribution

 

 

795

81

-

81

 

Share-based payment expense (Note 14)

 

 

407

39

47,509

47,548

 

 

 

 

                  

                  

                  

                  

 

 

 

 

 

 

 

 

 

 

 

 

19,885

3,060

47,509

50,569

 

 

 

 

                  

                  

                  

                  

 

€7.3 million (2017: €1.0 million) of employment costs were capitalised in inventory during the year.

 

 

 

14    Share-based payment arrangements

 

The Group operates three equity-settled share-based payment arrangements being the Founder Share scheme, the Long-Term Incentive Plan ("LTIP") and the Savings Related Share Option Scheme (known as the Save As You Earn or "SAYE" scheme) which is a new scheme that was approved during the year.

 

(a)  Founder Share Scheme

 

The founders of the Company (John Mulcahy, Justin Bickle (beneficially held by Durrow Ventures), and Stephen Garvey) subscribed for a total of 200,000,000 ordinary shares of €0.001 each for cash at par value during the prior period, which were subsequently converted to Founder Shares in advance of the Company's initial public offering. These shares entitle the Founders to share 20% of the Company's Total Shareholder Return ("TSR") (being the increase in market capitalisation of the Company, plus dividends or distributions in the relevant period) in each of five individual testing periods up to 30 June 2022, subject to achievement of a performance condition related to the Company's share price. Further details in respect of the Founder Shares are outlined in Note 26.

 

An expense of €47.5 million was recognised in the consolidated statement of profit or loss in the period ended 31 December 2017 with a corresponding increase in the share-based payment reserve. This represented the full grant date fair value of the Founder Shares which was recognised at grant date on the basis that no service condition attaches to the shares under the terms of the scheme. There has been no expense recognised in the current financial year and none will be recognised in future reporting periods. The following were the key assumptions used in determining the fair value at of Founder Shares grant date:

 

 

Founder

 

shares

 

 

Fair value at grant date

€0.24

Share price at grant date

€1.00

Exercise price

N/A

Expected volatility

34.12%

Expected life

5 years

Expected dividend yield

0%

Risk free rate

-0.023% - +0.18%

 

 

As set out in Note 26, 18,993,162 Founder Shares were converted to ordinary shares during the year following the completion of the first test period. This resulted in the re-classification of the portion of the €47.5 million share-based payment expense noted above which related to these shares (being €4.5 million) from the share-based payment reserve to retained earnings.

 

(b)  LTIP

 

The Group's LTIP was approved in 2017 and a total of 2,427,565 options have subsequently been granted to members of the senior management team (excluding Executive Directors). 839,065 options were granted in two separate tranches in the current year. All options granted to date are subject to the same service and performance conditions.

 

LTIP options will vest on completion of a three-year service period from grant date subject to the achievement of certain performance condition hurdles based on the Company's TSR across the vesting period. 25% of the award will vest once the 3-year annualised TSR reaches 6.25% per

 

 

14    Share-based payment arrangements (continued)

 

(b) LTIP (continued)

 

annum with the remaining options vesting on a pro rata basis up to 100% if TSR of 12.5% is achieved.

 

Details of options outstanding and grant date fair value assumptions

 

 

Number of

Options

 2018

Number of

Options

 2017

 

 

 

 

 

LTIP options in issue at the beginning of the financial year/period

 

1,588,500

 

Granted during the financial year/period

839,065

1,588,500

 

Cancelled during the financial year/period

(75,822)

-

 

 

                  

                  

 

LTIP options in issue at the end of the financial year/period

 

2,351,743

 

1,588,500

 

 

                  

                  

 

 

 

 

 

 

2018

2018

2017

 

 

Tranche 1

Tranche 2

 

 

Fair value at grant date

€0.48

€0.31

€0.64

 

Share price at grant date

€1.16

€0.87

€1.16

 

Valuation methodology

Monte Carlo

Monte Carlo

Monte Carlo

 

Exercise price

€0.001

€0.001

€0.001

 

Expected volatility

34.3%

28.1%

36.6%

 

Expected life

3 years

3 years

3 years

 

Expected dividend yield

0%

0%

0%

 

Risk free rate

-0.45%

-0.42%

-0.088%

 

 

The exercise price of all options granted under the LTIP to date is €0.001 and all options have a 7- year contractual life.

 

Given the Company did not have an extensive trading history at grant date, expected share price and TSR volatility was based on the volatility of a comparator group of peer companies over the expected life of the equity instruments granted together with consideration of the Company's actual trading volatility to date.

 

The Group recognised an expense of €0.4 million (2017: €0.04 million) in the consolidated statement of profit or loss in respect of options granted under the LTIP.

 

 

 

 

14    Share-based payment arrangements (continued)

 

 (c)             SAYE Scheme

 

The SAYE scheme was approved by the Board during the year and a total of 506,040 options have subsequently been granted to employees of the Group. Under the terms of the scheme, employees may save up to €500 per month from their net salaries for a fixed term of three or five years and at the end of the savings period they have the option to buy shares in the Company at a fixed exercise price.

 

Details of options outstanding and grant date fair value assumptions

 

 

Number of

Options

 3 Year

Number of

Options

5 Year

 

 

 

 

 

SAYE options in issue at 1 January 2018

-

 

Granted during the financial year/period

356,040

150,000

 

Cancelled during the financial year/period

(14,400)

-

 

 

                  

                  

 

 

 

 

 

SAYE options in issue at 31 December 2018

341,640

150,000

 

 

                  

                  

 

 

 

 

 

3 Year

5 Year

 

 

 

 

 

Fair value at grant date

€0.20

€0.23

 

Share price at grant date

€1.03

€1.03

 

Valuation Methodology

Monte Carlo

Monte Carlo

 

Exercise price

€1.00

€1.00

 

Expected volatility

26.8%

29.6%

 

Expected life

3 years

5 years

 

Expected dividend yield

0%

1.4%

 

Risk free rate

-0.14%

-0.42%

 

 

 

Given the Company did not have an extensive trading history at grant date, expected share price and TSR volatility was based on the volatility of a comparator group of peer companies over the expected life of the equity instruments granted together with consideration of the Company's actual trading volatility to date.

 

The Group recognised an expense of €0.01 million consolidated statement of profit or loss in respect of options granted under the SAYE scheme.

 

 

15   Loss per share

 

The calculation of basic loss per share has been based on the loss attributable to ordinary shareholders and the weighted average numbers of shares outstanding for the financial year. There were 871,333,550 ordinary shares in issue at 31 December 2018 (2017: 667,049,000). Ordinary shares potentially issuable from share-based payment arrangements are anti-dilutive due to the loss in the financial year meaning there is no difference between basic and diluted earnings per share. The number of potentially issuable shares in the Company held under option or Founder Share arrangements at 31 December 2018 is 183,850,221 (2017: 201,588,500).

 

 

 

 

Period from

 

 

 

incorporation

 

 

 

on 9 August

 

 

Year ended

2017 to 31

 

 

31 December

December

 

 

2018

2017

 

 

 

 

 

Loss for the year attributable to ordinary shareholders (€'000)

(3,930)

(51,384)

 

Weighted average number of shares for the financial year/period

745,664,898

374,284,264

 

 

                  

                  

 

 

 

 

 

Basic and diluted loss per share (cents)

(0.53)

(13.73)

 

 

                  

                  

 

 

 

2018

2017

 

 

No. of shares

No. of shares

 

 

 

 

 

Reconciliation of weighted average number of shares

 

 

 

 

 

 

 

Issued ordinary shares at beginning of financial year/period

667,049,000

1

 

Effect of Founder Shares Converted

7,545,229

-

 

Effect of shares re-designated as Founder Shares

-

(188,888,889)

 

Effect of shares issued related to business combinations

-

2,428,701

 

Effect of shares issued for cash

71,070,669

500,260,076

 

Effect of shares issued as consideration for inventories

-

60,484,375

 

 

                  

                  

 

 

 

 

 

 

745,664,898

374,284,264

 

 

                  

                  

 

See Note 26 for further information in relation to significant share issuances.

 

 

 

16

Income tax

 

 

 

 

 

 

 

 

 

Period from

 

 

 

incorporation

 

 

Year ended

on 9 August

 

 

31 December

2017 to 31

 

 

2018

December 2017

 

 

€'000

€'000

 

 

 

 

 

Current tax charge/(credit) for the financial year/period

18

(246)

 

Deferred tax credit for the financial year/period

(57)

(151)

 

 

                  

                  

 

 

 

 

 

Total income tax credit

(39)

(397)

 

 

                  

                  

 

 

 

 

 

The tax assessed for the financial year differs from the standard rate of tax in Ireland for the financial year. The differences are explained below.

 

 

 

Period from

 

 

 

incorporation

 

 

Year ended

on 9 August

 

 

31 December

2017 to 31

 

 

2018

 December 2017

 

 

€'000

€'000

 

 

 

 

 

Loss before tax for the financial year/period

(3,969)

(51,781)

 

 

                  

                  

 

 

 

 

 

Tax credit at standard Irish income tax rate of 12.5%

(496)

(6,473)

 

 

 

 

 

Tax effect of:

 

 

 

Income taxed at the higher rate of corporation tax

324

5

 

Non-deductible expenses - Founder Share expense

-

5,938

 

Non-deductible expenses - other

109

248

 

Other adjustments

24

(115)

 

 

                  

                  

 

 

 

 

 

Total income tax credit

(39)

(397)

 

 

                  

                  

 

 

 

 

 

 

Movement in deferred tax balances

 

 

 

 

 

Balance at

 

Balance at

 

 

1 January

Recognised in

31 December

 

 

2018

profit or loss

2018

 

 

€'000

€'000

€'000

 

 

 

 

 

 

Tax losses carried forward

151

57

208

 

 

                  

                  

                  

 

 

 

 

 

 

 

151

57

208

 

 

                  

                  

                  

 

 

 

 

 

 

 

16  Income tax (continued)

 

The deferred tax asset accrues in Ireland and therefore has no expiry date. Management has considered it probable that future profits will be available against which the above losses can be recovered and, therefore, the related deferred tax asset can be realised.

 

 

17

Property, plant and equipment

Land &

Fixtures

Plant &

Computer

 

 

 

buildings

& fittings

machinery

equipment

Total

 

 

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

At 1 January 2018

-

331

1,161

57

1,549

 

Acquisitions through business

 

 

 

 

 

 

combinations (Note 25)

-

-

62

-

62

 

Additions

7,713

417

2,136

356

10,622

 

Disposals

-

-

(18)

(6)

(24)

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

At 31 December 2018

7,713

748

3,341

407

12,209

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

At 1 January 2018

-

(15)

(50)

(8)

(73)

 

Charge for the year

(36)

(74)

(452)

(83)

(645)

 

Disposals

-

-

2

4

6

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

At 31 December 2018

(36)

(89)

(500)

(87)

(712)

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 31 December 2017

-

316

1,111

49

1,476

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

At 31 December 2018

7,677

659

2,841

320

11,497

 

 

                  

                  

                  

                  

                  

 

The depreciation charge for the year includes €0.5 million (2017: €0.015 million) which was capitalised in inventory at 31 December 2018.The Group leases plant and machinery under finance lease arrangements. As at 31 December 2018, the net book value of leased equipment was €0.05 million (2017: €0.3 million).

 

 

 

18

Intangible assets

 

 

 

 

 

 

Computer

 

 

 

 Licence

  Software

  Total

 

 

€'000

€'000

€'000

 

 

 

 

 

 

Cost

 

 

 

 

At 1 January 2018

-

145

145

 

Acquisitions through business

 

 

 

 

combinations (Note 25)

149

-

149

 

Additions

-

564

564

 

 

                  

                  

                  

 

 

 

 

 

 

At 31 December 2018

149

709

858

 

 

                  

                  

                  

 

 

 

 

 

 

Accumulated amortisation

 

 

 

 

At 1 January 2018

-

(70)

(70)

 

Charge for the year

-

(61)

(61)

 

 

                  

                  

                  

 

 

 

 

 

 

At 31 December 2018

-

(131)

(131)

 

 

                  

                  

                  

 

 

 

 

 

 

Net book value

 

 

 

 

At 31 December 2017

-

75

75

 

 

                  

                  

                  

 

 

 

 

 

 

At 31 December 2018

149

578

727

 

 

                  

                  

                  

 

 

19

  Inventory

 

 

 

 

 

2018

2017

 

 

€'000

€'000

 

 

 

 

 

  Land held for development (i)

597,028

216,964

 

  Development expenditure

100,964

11,125

 

  Development rights (ii)

20,870

-

 

 

                  

                  

 

 

        

        

 

 

718,862

228,089

 

 

                  

                  

 

€66.6 million (2017: €0.9 million) of inventory was recognised in 'cost of sales' during the year ended 31 December 2018.

 

 

 

19

Inventory (continued)

 

 

(i)         Development land acquisitions completed during the year

 

East Road

 

The Group entered into an unconditional contract to acquire a 2-hectare site in the North Docklands, Dublin known as "East Road" in December 2017. At 31 December 2017 an amount of €44.6 million was recognised within trade and other receivables reflecting the payment of full consideration

and related stamp duty and acquisition costs at that date. The transaction completed in January 2018 resulting in the transfer of this amount to inventory.

 

Millennium Park, Naas, Co. Kildare

 

On 22 December 2017, the Group announced it had entered into an unconditional contract to acquire a development site at Millennium Park, Naas, Co. Kildare. At 31 December 2017 an amount of €2.1 million was recognised within trade and other receivables reflecting a deposit paid. This transaction completed in January 2018 resulting in a further payment of €20.5 million bringing total consideration including stamp duty and acquisition costs to €22.6 million.

 

Citywest, Dublin

           

In January 2018, the Group exchanged contracts to acquire a development site at Citywest Road, Dublin 24. This transaction completed in December 2018 for total consideration of €12.9 million (including fees and stamp duty).

 

Hollystown Golf & Leisure Limited

 

The acquisition of Hollystown Golf & Leisure Limited on 28 February 2018 resulted in an increase in inventory of €14.6 million at the date of acquisition reflecting fair value of development land acquired at that date. Further detail in relation to this transaction is outlined in Note 25.

 

Project Quattro

 

On 13 March 2018 the Group entered into a contract to acquire four sites in the Greater Dublin Area ("GDA"): two in Donabate, Co. Dublin; one at Dunboyne, Co. Meath; and one at Stamullen, Co. Meath. The transaction involved cash consideration of €90 million (including fees and stamp duty) and completed in April 2018.

 

Tyrellstown, Dublin

 

In July 2018, the Group acquired a c. 113-hectare site (39 hectares of which are zoned residential) in Tyrellstown, Dublin 15. The exact purchase price is commercially sensitive but is in excess of €65 million.

 

Project Bill / Project Hector / Cork Docklands

 

In June 2018, the Group acquired three sites for an aggregate consideration of in excess of €44 million (excluding fees and stamp duty). These acquisitions were announced by the Company on 29 June 2018 and included, Project Bill under the terms of the Project Bill Acquisition Agreement signed on 28 June 2018; Project Hector under the terms of the Project Hector Acquisition Agreement signed on 29 June 2018 and a site in the Cork Docklands under the terms of the Cork Docklands Acquisition Agreement signed on 18 June 2018.

 

19

Inventory (continued)

 

(i)         Development land acquisitions completed during the year (continued)

 

 

Castleforbes, North Docklands, Dublin

 

In June 2018, the Group acquired a loan secured against Castleforbes Business Park for total consideration of €59.9 million (including fees and stamp duty) together with the separate acquisition of common areas and roads on the site for €5.4 million (including fees and stamp duty) which were obtained through the Group's acquisition of Bulwark Limited. The purchase completed on 9 July 2018. Subsequent to acquisition, the Group secured title to the full site (including roads and common areas) through the settlement of the loan resulting in the classification of Castleforbes Business Park within inventory at 31 December 2018.

 

(ii)         Development rights

 

 

Tallaght, Dublin 24 / Gateway Retail Park, Co. Galway

 

On 12 March 2018, the Group entered into an Acquisition and Profit Share Agreement ("APSA") with Targeted Investment Opportunities ICAV ("TIO"), a wholly owned subsidiary of OCM Luxembourg EPF III S.a.r.l. Under the terms of the APSA, the Group acquired certain development rights in respect of sites at The Square Shopping Centre, Tallaght, Dublin 24 and Gateway Retail Park, Knocknacarra, Co. Galway for aggregate consideration of approximately €13.9 million (including stamp duty and acquisition costs). The development rights will (subject to planning) entitle the Group to develop at least 750 residential units under two joint business plans to be undertaken with Sigma Retail Partners (on behalf of TIO) which will also entitle TIO to control and benefit from any retail development at both sites. The Directors have determined that joint control over both sites exists and the arrangements have been accounted for as joint operations in accordance with IFRS 11 Joint Arrangements. For further information regarding the APSA, see Note 29 of these financial statements.

 

Maryborough Ridge, Cork

 

On 22 December 2018, the Group entered into a licence agreement to develop 18.65 acres at Maryborough Ridge, Cork. At 31 December 2018 an amount of €6.9 million was recognised within inventory reflecting the licence fee paid to date. Subject to meeting the conditions of the licence agreement, a further amount of €6.1 million will be paid in the future as outlined in Note 30.

 

 

 

 

 20

Trade and other receivables

 

 

 

 

2018

2017

 

 

€'000

€'000

 

 

 

 

 

Trade receivables

249

-

 

Trade receivables from related party

-

1,192

 

Other receivables

70

107

 

Prepayments

1,065

492

 

Unamortised transaction costs on debt facility

788

-

 

VAT recoverable

6,461

16,912

 

Construction bonds

3,377

1,139

 

Deposits for sites

2,497

4,953

 

Payment in respect of site acquisition and associated fees*

-

44,579

 

 

                  

                  

 

 

 

 

 

 

14,507

69,374

 

 

                  

                  

 

*This amount related to payment of the purchase price, stamp duty and acquisition costs for a 2-hectare site in Dublin's North Docklands known as "East Road". A conditional contract was signed in December 2017 with payment transferred to the vendor's legal representatives in advance of period end. The transaction subsequently completed in January 2018.

 

The carrying value of all financial assets and trade and other receivables is approximate to their fair value.

 

 

21

 

 

Trade and other payables

 

 

 

 

 

2018

2017

 

 

€'000

€'000

 

 

 

 

 

Trade payables

7,821

3,036

 

Trade payables due to related party

-

1,434

 

Payroll and other taxes

2,787

922

 

Inventory accruals

21,289

4,057

 

Other accruals

3,096

2,400

 

Interest accrual

196

-

 

 

                  

                  

 

 

 

 

 

 

35,189

11,849

 

 

                  

                  

 

 

 

 

 

 

 

 

 

Non-current

1,803

1,903

 

Current

33,386

9,946

 

 

                  

                  

 

 

 

 

 

 

35,189

                  

11,849

                  

 

The carrying value of all financial liabilities and trade and other payables is approximate to their fair value.
 

 

22    Loans and Borrowings

 

In April 2018, the Group entered into a RCF for a total of €250.0 million (of which €125.0 million is committed) with a syndicate of domestic and international banks for a term of 3 years at an interest rate of one-month EURIBOR (subject to a floor of 0 per cent.) plus a margin. Amounts drawn during the year were repaid in full pre-year end resulting in a €nil principal balance outstanding at 31 December 2018. There is a commitment fee payable on the undrawn down value of the RCF. The amount payable at the reporting date is outlined in Note 21. Pursuant to the RCF agreement, there is a fixed and floating charge in place over certain assets of the Group as continuing security for the discharge of any amounts drawn down. 

 

23    Restricted cash

 

The restricted cash balance relates to €1.5 million held in escrow until the completion of certain infrastructural works relating to the Group's residential development at Balbriggan, Co. Dublin. The estimated fair value of restricted cash as at 31 December 2018 is its carrying value.

 

 

24    Subsidiaries

 

The subsidiary companies (all of which are resident in Ireland) and the percentage shareholdings held by Glenveagh Properties PLC, either directly or indirectly, at 31 December 2018 are as follows:

 

 

Company

Principal activity

%

Reg.office

 

 

 

 

 

 

Glenveagh Properties (Holdings) Limited

Holding company

100%

1

 

Glenveagh Treasury DAC

Financing activities

100%

2

 

Glenveagh Contracting Limited

Property development

100%

2

 

Glenveagh Homes Limited

Property development

100%

2

 

Greystones Devco Limited

Property development

100%

1

 

Marina Quarter Limited

Property development

100%

2

 

GLV Bay Lane Limited

Property development

100%

2

 

Glenveagh Living Limited

Property development

100%

1

 

GL Partnership Opportunities DAC

Property development

100%

1

 

GL Partnership Opportunities II DAC

Property development

100%

1

 

Hollystown Golf & Leisure Limited

Golf Club operations

100%

2

 

GLL PRS HoldCo Limited

Dormant company

100%

1

 

GLL Partnership HoldCo Limited

Dormant company

100%

1

 

GLL HoldCo Limited

Dormant company

100%

1

 

Into the Future (South) Limited

Dormant company

100%

2

 

Feathermist Limited

Dormant company

100%

2

 

Braddington Developments Limited

Dormant company

100%

2

 

Bulwark Limited

Dormant company

100%

1

 

1    15 Merrion Square North, Dublin 2, D02 YN15

2    Block B, Maynooth Business Campus, Maynooth, Co. Kildare, W23W5X7   

 

 

25    Business combinations

 

 

On 28 February 2018, Glenveagh Homes Limited (a subsidiary of the Company) acquired 100 per cent. of the share capital of Hollystown Golf and Leisure Limited (HGL). The table below summarises the fair value of consideration transferred and assets and liabilities assumed at that date.

 

 

 

€'000

 

 

 

 

Property, plant and equipment

62

 

Intangible assets

149

 

Inventory

14,654

 

Trade and other receivables

102

 

Cash and cash equivalents

15

 

Trade and other payables

(1,319)

 

 

                          

 

 

 

 

Fair value of net assets acquired

13,663

 

 

                          

 

 

 

 

Consideration

 

 

Cash consideration

13,663

 

 

                          

 

 

 

 

Total consideration

13,663

 

 

                  

 

Consideration of €13.7 million was paid in respect of this acquisition which was primarily executed to access the development potential of land owned by HGL. Under the terms of an overage covenant signed in connection with the acquisition, the Group has committed to paying the vendor an amount equal to an agreed percentage of the uplift in market value of the property should any lands owned by HGL, that are not currently zoned for residential development be awarded a residential zoning. This commitment has been treated as contingent consideration and the fair value of the contingent consideration at the acquisition date was initially recognised at €nil. At the reporting date, the fair value of this contingent consideration was considered insignificant.

 

HGL has not had a material impact on the consolidated loss for the post acquisition period and had the acquisition taken place at beginning of the financial year the impact would still not have been material.

 

 

 

 

26  Share capital and share premium

 

(a)   Authorised share capital

 

 

 

 

2018

2017

 

 

 

 

Number of

 

Number of

 

 

 

 

shares

€'000

shares

€'000

 

 

 

 

 

 

 

 

Ordinary Shares of €0.001 each

 

1,000,000,000

1,000

1,000,000,000

1,000

 

Founder Shares of €0.001 each

 

200,000,000

200

200,000,000

200

 

Deferred Shares of €0.001 each

 

200,000,000

200

200,000,000

200

 

 

 

                       

                     

                       

                       

 

 

 

 

 

 

 

 

 

 

1,400,000,000

1,400

1,400,000,000

1,400

 

 

 

                       

                     

                       

                       
               

 

(b)   Issued share capital and share premium

 

At 31 December 2018

 

 

 

Share

Share

 

 

 

 

Number of

capital

premium

 

 

 

 

shares

€'000

€'000

 

 

 

 

 

 

 

 

Ordinary Shares of €0.001 each

 

 

871,333,550

871

879,281

 

Founder Shares of €0.001 each

 

 

181,006,838

181

-

 

 

 

 

                       

                  

                       

 

 

 

 

 

 

 

 

 

 

 

1,052,340,388

1,052

879,281

 

 

 

 

 

 

                       

                  

                       

At 31 December 2017

 

 

 

Share

Share

 

 

 

 

Number of

Capital

premium

 

 

 

 

shares

€'000

€'000

 

 

 

 

 

 

 

 

Ordinary Shares of €0.001 each

 

 

667,049,000

667

666,381

 

Founder Shares of €0.001 each

 

 

200,000,000

200

-

 

 

 

 

                       

                  

                       

 

 

 

 

 

 

 

 

 

 

 

867,049,000

867

666,381

 

 

 

 

                       

                  

                       

(c)   Reconciliation of shares in issue

 

In respect of current year

 

Ordinary

Founder

Share

Share

 

 

 

shares

shares

capital

premium

 

 

 

'000

'000

€'000

€'000

 

 

 

 

 

 

 

 

In issue at 1 January 2018

 

667,049

200,000

867

666,381

 

Issued for cash

 

185,291

-

185

212,900

 

Conversion of Founder Shares

 

18,993

(18,993)

-

-

 

 

 

                  

                  

                  

                  

 

 

 

 

 

 

 

 

 

 

871,333

181,007

1,052

879,281

 

 

 

 

                  

                  

                  

                  

 

 

 

26  Share capital and share premium (continued)

 

(c)   Reconciliation of shares in issue (continued)

 

In respect of prior year

 

Ordinary

Founder

Share

Share

 

 

 

shares

shares

capital

premium

 

 

 

'000

'000

€'000

€'000

 

 

 

 

 

 

 

 

In issue at incorporation on 9 August 2017

 

-

-

-

-

 

Issued for cash

 

200,001

-

200

-

 

Re-designation as Founder Shares

 

(200,000)

200,000

-

-

 

IPO issue

 

552,371

-

552

551,819

 

Issued in business combination

 

4,427

-

4

4,423

 

Issued as consideration for inventories

 

110,250

-

111

110,139

 

 

 

                  

                  

                  

                  

 

 

 

 

 

 

 

 

 

 

667,049

200,000

867

666,381

 

 

 

 

                  

                  

                  

                  

 

 

(d)   Rights of shares in issue

 

Ordinary Shares

The holders of Ordinary Shares are entitled to one vote per Ordinary Share at general meetings of the Company and are entitled to receive dividends as declared by the Company.

 

Founder Shares

 

Founder Shares do not confer on any holder thereof the right to receive notice of, attend, speak or vote at general meetings of the Company except in relation to resolutions regarding the voluntary winding up of the Company or the granting of further Founder Shares. Founder Shares do not entitle their holder to receive dividends.

 

Founder Shares entitle the Founders of the Company namely, Justin Bickle (through Durrow Ventures), Stephen Garvey and John Mulcahy to share 20% of the Company's TSR (calculated by reference to the change of control price plus dividends and distributions made) between admission and the change of control (less the value of any ordinary shares (at their original conversion or redemption price)) which have previously been converted or redeemed in the five years following the IPO of the Company.

 

This entitlement is subject to the achievement of a performance condition related to the Company's share price, specifically that a compound rate of return of 12.5% (adjusted for any dividends or other distributions and returns of capital made but excluding the value of any Founder Shares which have been redeemed) is achieved across five testing periods.

 

Following completion of the first test period (which ran from 1 March 2018 until 30 June 2018), it was confirmed that, Founder Share Value for the first test period would be satisfied by way of the conversion of 18,993,162 Founder Shares into the same number of Ordinary Shares of €0.001 each and these new shares were subsequently issued. All new Ordinary Shares issued in respect of the conversion of Founder Shares are subject to a lock-up period, with 50% of the new Ordinary Shares subject to a one-year lock-up period and the balance subject to a two-year lock-up. The closing market price of the Company's shares on 29 June 2018 was €1.15 per share.
 

 

26    Share capital and share premium (continued)

 

(e)   Significant share issuances during the year

 

(i)   On 9 August 2018, the Company issued 18,993,162 Ordinary Shares (through the conversion of 18,993,162 Founder Shares) to the Founders of the Company namely Justin Bickle (through Durrow Ventures), Stephen Garvey and John Mulcahy.

 

(ii)   On 14 August 2018, the Company issued 185,291,388 Ordinary Shares at €1.15 per share by way of a Firm Placing and Open Offer, raising gross proceeds of €213.1 million. €7.1 million of directly attributable share issue costs have been recognised in equity (retained earnings).

 

 

27    Financial instruments and financial risk management

 

The consolidated financial assets and financial liabilities are set out below. While all financial assets and liabilities are measured at amortised cost, the carrying amounts of the consolidated financial assets and financial liabilities approximate to fair value. Trade and other receivables and trade and other payables approximate to their fair value as the transactions which give rise to these balances arise in the normal course of trade and, where relevant, with industry standard payment terms and have a short period to maturity (less than one year).

 

 

Financial instruments: financial assets

 

 

 

 

2018

2017

 

The consolidated financial assets can be summarised as follows:

€'000

€'000

 

 

 

 

 

 

 

 

 

Trade receivables

249

-

 

Trade receivables from related party

-

1,192

 

Other receivables

70

107

 

Construction bonds

3,377

1,139

 

Deposits for sites

2,497

4,953

 

Cash and cash equivalents

130,701

351,796

 

Restricted cash (non-current)

1,500

1,500

 

 

                  

                  

 

 

 

 

 

Total financial assets

138,394

360,687

 

 

                  

                  

 

Cash and cash equivalents are short-term deposits held at variable rates.

 

 

 

27    Financial instruments and financial risk management (continued)

 

 

Financial instruments: financial liabilities

 

 

 

 

2018

2017

 

 

€'000

€'000

 

 

 

 

 

Trade payables

7,821

3,036

 

Trade payables due to related party

-

1,434

 

Finance lease obligation

38

254

 

Inventory accruals

23,713

4,057

 

Other accruals

672

2,400

 

 

                  

                  

 

 

 

 

 

Total financial liabilities

32,244

11,181

 

 

                  

                  

 

Trade payables and other current liabilities are non-interest bearing.

 

Financial risk management objectives and policies

 

As all of the operations carried out by the Group are in Euro there is no direct currency risk, and therefore the Group's main financial risks are primarily:

 

-      liquidity risk - the risk that suitable funding for the Group's activities may not be available;

-      credit risk - the risk that a counter-party will default on their contractual obligations resulting in a financial loss to the Group; and

-      market risk - the risk that changes in market prices, such as interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments.

 

This note presents information and quantitative disclosures about the Group's exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the Group's management of capital.

 

Liquidity risk

 

Liquidity risk is the risk that the Group may not be able to generate sufficient cash reserves to settle its obligations in full as they fall due or can only do so on terms that are materially disadvantageous. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring, unacceptable losses or risking damage to the Group's reputation. The Group's liquidity forecasts consider all planned development expenditure.

 

Management monitors the adequacy of the Group's liquidity reserves against rolling cash flow forecasts. In addition, the Group's liquidity risk management policy involves monitoring short-term and long-term cash flow forecasts. Set out below are details of the Group's contractual cash flows arising from its financial liabilities and funds available to meet these liabilities.

 
 

 

27    Financial instruments and financial risk management (continued)

 

Liquidity risk (continued)

 

 

 

 

31 December 2018

 

 

Carrying

Contractual

Less than

1 year

More than

 

 

amount

cash flows

1 year

to 2 years

2 years

 

 

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

 

Finance lease obligations

38

42

36

6

-

 

Trade payables

7,821

7,821

7,821

-

-

 

Inventory accruals

23,713

23,713

23,713

-

-

 

Other accruals

672

672

672

-

-

 

Loans and borrowings*

-

2,920

1,252

1,252

416

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

 

32,244

35,168

33,494

1,258

416

 

 

                  

                  

                  

                  

                  

 

*Contracted cash flows on loans and borrowings relate to commitment fee payable on the RCF.

 

 

 

31 December 2017

 

 

Carrying

Contractual

Less than

1 year

More than

 

 

amount

cash flows

1 year

to 2 years

2 years

 

 

€'000

€'000

€'000

€'000

€'000

 

 

 

 

 

 

 

 

Finance lease obligations

254

287

94

94

99

 

Trade payables

3,036

3,036

3,036

-

-

 

Amounts due to related party

1,434

1,434

1,434

-

-

 

Inventory accruals

4,057

4,057

4,057

-

-

 

Other accruals

2,400

2,400

2,400

-

-

 

Loans and borrowings

-

-

-

-

-

 

 

                  

                  

                  

                  

                  

 

 

 

 

 

 

 

 

 

11,181

11,214

11,021

94

99

 

 

                  

                  

                  

                  

                  

 

 

 

 

27    Financial instruments and financial risk management (continued)

 

Liquidity risk (continued)

 

      Funds available

 

 

 

2018

2017

 

€'000

€'000

 

 

 

    Revolving credit facility* (undrawn committed)

125,000

-

    Cash and cash equivalents

130,701

351,796

 

                  

                  

 

 

 

 

255,701

351,796

 

                  

                  

 

*The Group's RCF contains a mechanism through which the committed amount can be increased up to €250.0 million. Under the terms of the Group's RCF, the Group is required to maintain a minimum cash balance of €25.0 million in cash in cash equivalents throughout the term of the facility.

The Group's RCF is subject to primary financial covenants calculated on a quarterly basis:

-       A maximum net debt to net assets ratio;

-       A minimum cash reserves limit; and

-       A minimum EBITDA to net interest coverage ratio.

 

Credit risk

 

The Group's exposure to credit risk encompasses the financial assets being: trade and receivables and cash and cash equivalents. Credit risk is managed by regularly monitoring the Group's credit exposure to each counter-party to ensure credit quality of customers and financial institutions in line with internal limits approved by the Board.

 

There has been no impairment of trade receivables in the year presented. The impairment loss allowance allocated against trade receivables, cash and cash equivalents and restricted cash is not material. The credit risk on cash and cash equivalents is limited because counter-parties are leading international banks with minimum long-term BBB- credit-ratings assigned by international credit agencies. The maximum amount of credit exposure is the financial assets in this note.

 

Market risk

 

The Group's exposure to market risk relates to changes to interest rates and stems predominately from its debt obligations. In April 2018, the Group entered in to a RCF for a total of €250.0 million (of which €125.0 million is committed) with a syndicate of domestic and international banks for a term of 3 years at an interest rate of EURIBOR (subject to a floor of 0 per cent.) plus a margin. All amounts drawn under the facility during the year were repaid in full in advance of year end which is reflected in the €nil balance at 31 December 2018. The Group has an exposure to cash flow interest rate risk where there are changes in the EURIBOR rates. As the balance on the RCF was €nil at 31 December 2018 no interest rate sensitivities have been provided.   

 

 

 

27    Financial instruments and financial risk management (continued)

 

Capital management

 

The Group finances its operations by a combination of shareholders' funds and working capital. The Group's objective when managing capital is to maintain an appropriate capital structure in the business to allow management to focus on creating sustainable long-term value for its shareholders, with flexibility to take advantage of opportunities as they arise in the short and medium term. This allows the Group to take advantage of prevailing market conditions by investing in land and work-in-progress at the right point in the cycle.

 

 

28    Finance lease liabilities

 

Finance lease liabilities are payable as follows:

 

 

 

2018

2017

 

 

 

€'000

€'000

 

 

 

 

 

 

Current portion

 

33

84

 

Non-current portion

 

5

170

 

 

 

                  

                  

 

 

 

 

 

 

 

 

38

254

 

 

 

                  

                  

 

At 31 December 2018

 

 

Future

 

Present value

 

 

minimum

 

of minimum

 

 

lease

 

lease

 

 

payments

Interest

payments

 

 

€'000

€'000

€'000

 

 

 

 

 

 

Less than one year

36

3

33

 

Between one and two years

6

1

5

 

More than two years

-

-

-

 

 

                  

                  

                  

 

 

 

 

 

 

 

42

4

38

 

 

                  

                  

                  

 

  

 

28    Finance lease liabilities (continued)

 

At 31 December 2017

 

 

Future

 

Present value

 

 

minimum

 

of minimum

 

 

lease

 

lease

 

 

payments

Interest

payments

 

 

€'000

€'000

€'000

 

 

 

 

 

 

Less than one year

94

10

84

 

Between one and two years

94

10

84

 

More than two years

99

13

86

 

 

                  

                  

                  

 

 

 

 

 

 

 

287

33

254

 

 

                  

                  

                  

 

 

29    Related party transactions

 

(i)    Key Management Personnel remuneration

 

Key management personnel comprise the Non-Executive Directors and the Executive Committee. The aggregate compensation paid or payable to key management personnel in respect of the financial year was the following:

 

 

 

2018

2017

 

 

 

€'000

€'000

 

 

 

 

 

 

Short-term employee benefits

 

2,359

456

 

Post-employment benefits

 

74

27

 

LTIP and SAYE share-based payment expense

 

50

10

 

Founder Shares share-based payment expense

 

-

47,509

 

 

 

                  

                  

 

 

 

 

 

 

 

 

2,483

48,002

 

 

 

 

                  

                  



(ii)  Other related party transaction

 

As set out in Note 19 above, the Group entered into the APSA with TIO, a wholly owned subsidiary of OCM Luxembourg EPF III S.a.r.l. (OCM) (and an entity in which John Mulcahy and Justin Bickle are directors) on 12 March 2018.

 

Under the terms of the APSA, the Group acquired certain development rights in respect of sites at The Square Shopping Centre, Tallaght, Dublin 24 and Gateway Retail Park, Knocknacarra, Co. Galway for aggregate consideration of approximately €13.9 million (including stamp duty and transaction costs). The development rights will (subject to planning) entitle the Group to develop at least 750 residential units under two joint business plans to be undertaken with Sigma Retail Partners (on behalf of TIO) which will also entitle TIO to control and benefit from any retail development at both sites.
 

 

29    Related party transactions (continued)

 

(ii)  Other related party transactions (continued)

 

The Directors have determined that joint control over both sites exists and the arrangements have been accounted for as joint operations in accordance with IFRS 11 Joint Arrangements.

 

The APSA also stipulates certain profit-sharing arrangements in relation to the residential development opportunity at both sites together with a third site at Bray Retail Park, Bray, Co. Wicklow under which TIO would be entitled to a share of profit on any residential development should certain returns be achieved.

 

The agreement defines certain default events including TIO not possessing good and marketable title over the development sites and TIO not transferring good and marketable title over the development sites. On the occurrence of a default event, the Group shall be entitled to recover the aggregate purchase consideration in respect of the development rights. OCM has agreed to guarantee this obligation of TIO.

 

30    Commitments and contingent liabilities

 

(a)  Commitments arising from development land acquisitions

 

In addition to the contingent liabilities outlined in Notes 25 and 29 above, the Group had the following commitments at 31 December 2018 relating to development land acquisitions:

 

Land acquisition subject to re-zoning

 

In April 2018, the Group contracted to acquire 66 acres of currently unzoned land in the Greater Dublin Area subject to appropriate residential zoning being awarded in the next local authority development plan on at least 30 acres of the site. Once this minimum threshold is achieved, the Group has committed to acquiring the entire site at a fixed price per acre on land zoned for residential development with the remaining land to be acquired at market value.

 

Maryborough Ridge, Cork

 

(i)         Acquisition of development land

 

On 22 December 2018, the Group entered into an unconditional contract to acquire 24.34 acres of zoned land for residential development at Maryborough Ridge a development site at Douglas, Co. Cork for total consideration of €12.5 million. At 31 December 2018 an amount of €1.3 million was recognised within trade and other receivables reflecting a deposit paid and the transaction subsequently completed in February 2019.

 

(ii)         Licence agreement

 

The Group also entered into a licence agreement to develop a further 18.65 acres at the Maryborough Ridge site. At 31 December 2018 an amount of €6.9 million was recognised in inventory reflecting the initial licence fee paid and related stamp duty and acquisition costs. The remaining €6.1 million of the licence fee is payable in equal instalments in line with milestones outlined in the licence agreement which will bring the total consideration to approximately €13.0 million.
 

 

30    Commitments and contingent liabilities (continued)

 

Maryborough Ridge, Cork (continued)

 

(ii)         Licence agreement (continued)

 

Under the terms of the licence agreement, the Group has committed to paying the vendor further variable amounts dependent on the number of units developed and unit sale prices achieved in excess of those contemplated in the licence agreement. As these commitments are based on uncertain future events, the Group has treated them as contingent liabilities. The Group will reassess these commitments at each reporting date.

 

Castleknock

 

As at 31 December 2018, the Group had contracted to acquire a development site at Carpenterstown Road, Castleknock, Co. Dublin for total consideration of €9.3 million. A deposit of €0.9 million was paid pre-year end and is classified within other receivables at 31 December 2018. The transaction completed on 16 January 2019.

 

(b)  Operating lease commitments

 

Total commitments under non-cancellable operating leases are due as follows:

 

 

 

Minimum

Minimum

 

 

Payments

Payments

 

 

2018

2017

 

 

€'000

€'000

 

 

 

 

        Less than one year

 

805

279

        Between 1 - 5 years

 

500

52

        More than 5 years

 

-

-

 

 

                  

                  

 

 

 

 

 

 

1,305

331

 

 

                  

                  

 

31    Subsequent events

 

Subsequent to year end, the Group entered into a contract to acquire two further sites in the GDA: one at Leixlip, Co. Kildare and one at Newbridge, Co. Kildare which have full planning permission to deliver 793 starter-homes and apartments. These transactions involve aggregate cash consideration of approximately €50 million (excluding stamp duty and fees) and are scheduled to complete in Q2 2019.

Other than this acquisition and the completion of the Maryborough Ridge development land acquisition noted in Note 30, no other events requiring disclosure have occurred since 31 December 2018.

 

 

[1] Excluding fees and stamp duty

[2] Management estimates. At 31 December 2018

[3] Source: CSO

[4] Source: Davy

[5] Daft.ie

[6] In Q4 - Source: Hooke MacDonald

[7] CBRE

[8] European Commission


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
FR UGUUUWUPBGRA

Companies

Glenveagh Properties (CDI) (GLV)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today